5 timeless money lessons from India’s Panchatantra Stories – Money News #IndiaFinance

Personal finance can be tough with all the spreadsheets, apps, and confusing terms. But honestly, the basics of making wise money choices like savings, being patient, taking risks, and being resourceful have been around forever. Before we had banks and budgeting apps, these ideas were passed down through stories that shaped how people thought in India.

In ancient India, storytelling was more than just entertainment; it was a way to teach lessons. The Panchatantra was designed to help young princes learn how to live wisely. At the same time, epics like the Ramayana and Mahabharata offered moral guidance and strategic thinking, including how to handle money, make tough decisions, and bounce back from setbacks. These stories still matter today, especially when we look at them in the context of personal finance.

By taking a fresh look at these tales, we can find financial lessons that are still useful and relatable.

#1 Be Careful Whom You Trust: The Monkey and the Crocodile

This short story illustrates the crocodile befriending the monkey only to take him to his home to consume him. The monkey comes to grips with the crocodile’s considerateness in eating him, confronts the crocodile with his trick, and escapes. This story has a universal personal finance lesson: do not give blind faith to your money manager.

We talk about careful discernment in today’s financial landscape about who you trust, whether they are financial advisors, agents who invest for you, or online portals. Scams and frauds are all built upon trust; usually, they involve an unrealistic return or opportunity tied to a closed-door insider deal. Before you part with your money, verify credentials and validate they are registered with the regulators (financial advisors must be SEBI registered in India), as well as referrals or reviews you can check. Educate yourself enough to question advice that seems too good to be true.

#2 Think Before You Act: The Story of the Turtle and the Geese

In this fable from the Panchatantra, two geese carry a turtle in the air while holding onto a stick with their mouth. The only stipulation was that he could not make a noise. But when the people below provoked the turtle, he could not suppress himself and lost his grip and fell.

In personal finance, the problem of action appears as impulsive decisions. You may lock in losses by heading in the wrong direction when the markets fall and you panic sell. Conversely, you may lose your life savings through impulsive purchases. This tale reminds us that we must have a deliberate method in our decision-making, especially financial decision-making.

Markets fluctuate and have spotty returns; patience and remaining in the same direction will benefit most people who want to grow wealth over time. The same can be said for larger purchases or investments. Give yourself a moment during your life to see your needs and wants while attempting to take out any reactionary actions and risks.

#3 The Benefits of Diversity: The Story of the Birds and the Net

In the classic Panchatantra tale, a flock of birds comes down to peck the grains scattered below, ignorant of a hunter’s net. They become entangled in the net and panic; however, one of the birds calms them down and suggests they work together. Instead of wasting their energy trying to fly on their own, they agree that, as a group, they will take off, lift the net together, and fly to a location that will eventually allow them to escape.

This story shows the value of working with others and finding a plan to work through difficult times. In personal finance, the story relates to diversification. When an individual is too reliant on a single investment (a stock, sector, asset, etc.), they bear extreme, unnecessary risk. If this asset loses value, the outcome can be severe.

A relatively diversified financial plan would include investments across several asset classes. This should reduce overall risk and provide balance. Diversifying an investment provides a safety net against not being able to achieve long-term financial goals if one asset struggles. Just like the birds working together to escape from the net, a diverse pool of investments should represent a source of protection and growth for your financial health.

#4 Preparing for the Unknown: The Crow and the Snake

In this fable from the Panchatantra, the crow has lost its eggs to the snake in the neighbourhood too many times to count. The crow opts for a much better plan, as it knows that the snake is out finding food during the day. The crow drops a gold necklace in the snake’s hole. When the snake makes itself known to the surrounding people while they search for their ornament, they find the snake, and the crow is rid of that threat.

This story illustrates the concept of foresight and preparation. As the crow prepares for danger through pre-emptive action, we must prepare for the unknown. Day-to-day life will throw us financial emergencies, such as medical bills, income loss, accidents, and emergencies.

The lesson here is about achieving your long-term goals by planning to deal with near term contingences. This could be done by having an emergency fund with six to nine months of expenses at least, and health insurance among others. Such planning protects your long-term dreams from the possible realities that may arise from anticipated crises.

#5 Don’t Judge a Book by Its Cover: The Donkey in a Tiger’s Skin

In this Panchatantra story, a washerman dresses a donkey in tiger skin to graze peacefully without interfering with the animal’s behaviour. The donkey stays quiet until it makes a loud bray that gives itself away, which leads to the villagers punishing it for tricking them.

This lesson reminds us to be aware of appearances, especially in finance. Numerous investment schemes tout “guaranteed returns” or are too good to be true, only to be mere disguises of schemes with risk and even potential fraud, similar to the donkey dressed up. It is easy to get trapped into focusing on a brand’s shiny appearance or the convincing manner of a seller when you are sacrificing your financial health.

It is easy to extrapolate that this lesson means always doing your due diligence before committing to any investment. Verify the information off credible sources, check reviews on the service from customers, or check for any alerts from regulatory authorities like SEBI or RBI. Don’t allow an agent’s presentation to bypass your way of caution by using your own independent thinking and research; what you do and know is worth more than the appearance of grand schemes.

While the Panchatantra was written thousands of years ago, the lessons in the stories are eerily relevant in today’s financial world. Aside from simply providing entertainment, the stories offer deep insights and essential lessons in behaving with money. Be deliberate before you act, be prepared for the worst, value diversified wealth, extend your wealth, and maintain its protection; all provide practical wisdom with powerful lessons embedded in their fables.

As you build your financial future, remember these stories. They provide further direction on the idea that the best advice involving money sometimes has little to do with experts or the latest textbooks but instead comes from stories that have been told for so many thousands of years. Let the Panchatantra guide you while proving that even the oldest stories offer valuable insights into modern behaviour involving money.